In 1996, Congress enacted a powerful statutory immunity for user-generated content, located at 47 U.S.C. 230 ("Section 230"). Section 230 says that websites aren't liable for third party content except in three specific situations: intellectual property, communications privacy and federal criminal prosecutions. Over the past 16 years, courts have interpreted Section 230's immunity broadly, giving online providers a robust and predictable way to avoid liability for what their users say and do. As a result, Section 230 has become the foundation for the entire user-generated content industry--and all of the social welfare that goes along with it.

Recently, the Washington state legislature enacted one such law in an overzealous effort to shut down online child prostitution. Even worse, the statute indirectly provided a roadmap for other legislatures to enact other laws that could eviscerate Section 230. Last week, in Backpage and Internet Archive v. McKenna, 2:12-cv-00954-RSM (W.D. Wash. July 27, 2012), a federal judge rejected the Washington legislature's efforts, turning the case into a major victory for Section 230 and user-generated content.

Background

As part of a nationwide effort to combat "sex trafficking" and online prostitution, various regulators have tried to shut down online classified ads for "escorts" and other adult services. For many years, Craigslist was the leader for that kind of advertising, and in 2009 the Cook County (Illinois) Sheriff sued Craigslist for facilitating prostitution. A federal judge quickly rejected that lawsuit based on Section 230 because the sheriff was trying to hold Craigslist liable for third party advertisements. (Section 230 jurisprudence is clear that third party advertisements are just as protected by the immunity as other types of editorial content from third parties).

Despite that decisive ruling and the strong likelihood that Craigslist's activities were completely legal, attorneys generals from dozens of states kept hounding Craigslist for offering an "adult services" category. Eventually, despite having won in court, Craigslist gave up and shut down its adult services category.

(Photo credit: edkohler)

While that gave the various anti-prostitution regulators a seeming victory, Craigslist's exit from the industry didn't change the underlying marketplace demand or supply for prostitution. As a result, the "escort" ads simply migrated elsewhere--largely to Backpage.com, affiliated with the Village Voice. As the ads migrated, so did the regulators' attention, and Backpage soon experienced the same regulatory fire that had been directed at Craigslist.

In 2011, Backpage won a lawsuit brought by a child prostitution victim on Section 230 grounds. Combined with Craigslist's Section 230, it was clear that any regulator seeking to shut down prostitution ads on Backpage--or any other web publication--would have to overcome Section 230 somehow.

The Washington state legislature thought it found such a workaround. Instead of holding Backpage liable for third party advertisements, SB 6251 imposes an age verification obligation on anyone that publishes online prostitution ads. Websites are criminally liable if they "know" they are publishing prostitution ads that depict underage models, but the statute says the websites have a criminal level of "knowledge" unless they can provide documentary proof that the depicted model is an adult. Thus, simply reviewing the ad and making a visual judgment of the model's age wouldn't satisfy the statute. This way, the statute criminalizes the website's failure to do its verification and record-keeping obligations instead of holding the website liable for the third party advertisements.

The judge said SB 6251 conflicts with Section 230 because (1) it imposes liability based on third party content, and (2) it gives websites a disincentive to monitor their website (in an effort to avoid the requisite "knowledge" that leads to criminal liability), something Congress was trying to encourage websites to do. Thus, by basing liability on a website's "knowledge" regarding third party content, the statute easily sets up the conflict with Section 230.

Washington tried to argue that Section 230 doesn't preempt state criminal prosecutions. While Section 230 expressly excludes federal prosecutions, the judge says it clearly immunizes websites from state criminal prosecutions based on third party content. See also the uncited Voicenet v. Corbett.

The judge enjoined the law on two other grounds as well. First, the judge says that the law probably violates the First Amendment, suggesting (among other reasons) that imposing a content pre-screening obligation on online publishers may cause too much self-censorship. The judge also questions why the legislature couldn't pursue a less restrictive statutory option of holding the advertisers, rather than third party publishers, liable for the advertisements.

Second, the judge says the law probably violates the Dormant Commerce Clause, a Constitutional doctrine that says only Congress, and not the states, can regulate interstate commerce. Personally, I think every state law purporting to regulate the Internet violates the Dormant Commerce Clause, but courts haven't reached that definitive conclusion yet. Nevertheless, this judge comes close, saying "the Internet is likely a unique aspect of commerce that demands national treatment." Thus, he correctly concludes that Washington's attempt to control Internet behavior in Washington would nevertheless cause Internet companies and users interacting wholly outside of Washington to change their behavior, something the Dormant Clause doesn't permit.

Implications

Perhaps we might consider age verification for prostitution ads an acceptable obligation in the abstract, but consider the implications. Other state legislatures could try to impose other types of verification and record-keeping obligations on user-generated content websites. For example, statutes could obligate websites to verify users' identities or geographic locations before allowing the users to publish content, or a statute could require websites to undertake specific obligations (or impose a general obligation) to verify factual assertions in content submitted by users. The statutes could then further impute bad knowledge to the website if they don't satisfy their verification and record-keeping obligations.

Following this basic regulatory structure, statutes like these could undo Section 230's basic immunity structure. They could make websites undertake costly and unwanted verification and record-keeping efforts, which could make it cost-prohibitive for user-generated content websites--especially new entrants to the market. The statutes could slow down and chill user contributions to the discourse. As I was quoted elsewhere in discussing this case, "imagine Twitter without real-time posting." Finally, the statutes could allow government prosecutors and private plaintiffs to hold websites liable for user content for erroneous verifications, resulting in crippling liability exposure. This ruling shuts down all of these potential statutory workarounds.

Unfortunately, a single federal district court ruling is hardly the last word on the topic (indeed, the Washington attorney general office's press release makes it clear they aren't finished with the matter). First, Washington might choose to appeal the ruling, although the opinion is solidly constructed and should fare well in the Ninth Circuit.

Second, state legislators will keep passing laws that conflict with Section 230. After all, state legislatures routinely and knowingly enact laws that obviously violate U.S. Supreme Court precedent, rationalizing that it's the legislators' job to pass laws and it's the judicial system's job to decide if those laws are constitutional. However, I don't see an easy way for state legislatures to work around the First Amendment and Dormant Commerce Clause deficiencies identified in this opinion, even if they could somehow work around the Section 230 conflict.

Third, the anti-online prostitution forces could rally to try to amend Section 230. Over the years, many special interest groups have talked about amending Section 230, but those efforts have rarely gone anywhere. I'd be surprised if this issue could lead to succeed where the other issues haven't. Amending Section 230 to address online prostitution would be a spectacularly bad idea for reasons I explained here.

For now, this opinion helps preserve the vitality of Section 230. That's something to celebrate.

I am a professor at Santa Clara University School of Law, where I teach and write about Internet Law, Intellectual Property and Advertising Law. Before I became a full-time professor in 2002, I practiced technology law in the Silicon Valley from 1994-2002. I've been bloggi...